When you apply for credit, lenders will use one of three credit checking services – Experian, Equifax and Callcredit – to check your credit history.
This record shows them how responsible you’ve been when borrowing in the past.
The great news is that each agency offers a free service – Noddle owned by Callcredit, ClearScore by Equifax and CreditMatcher by Experian – so you can check your credit history too.
You’ll be given a credit score when you sign up to a credit checking agency, but which agency gives the best one? Well, truthfully, none of them. The thing is, this score is not something lenders will see. Rather than the score, it’s your credit history that matters.
But, it’s important not to get too caught up in the importance of your score. In fact, the score you’re given is unique to that particular credit checking agency. There is no such thing as a ‘universal’ credit score.
Each agency uses their own scoring system, which makes it difficult to pinpoint what an average credit score looks like.
Shall I sign up?
By signing up to a credit-checking agency, you can see what information they hold about you. If you do come across any errors, you can get these amended.
Although your score isn’t the be-all and end-all, it’s useful to see how you’re ranked by the credit checking agencies. If your score increases over time, you know that your credit history is improving.
What’s the difference?
Let’s start with Noddle. When you sign up, you’re given a score out of 710 and a rating out of five. This highlights how much of a risk Noddle thinks you’ll present to a lender.
With ClearScore you are scored out of 700, while CreditMatcher scores you out of 999. You are ranked on a scale from very poor to excellent.
But rather than your score, it’s your credit history you should pay attention to. When you sign up to a credit reference agency, see whether there are any negative marks on your credit history. After all, these will be visible to lenders.
You’ll be able to access this information on Noddle and ClearScore, but you can’t access your full credit history on CreditMatcher. To do so, you’ll have to upgrade to the fee-paying service.
Your credit history shows how well you’ve managed credit in the past. If you’ve previously missed payments, defaulted or ever been issued with a County Court Judgement (CCJ), these will all be highlighted. They will be visible to other lenders and remain on your credit history for six years or so.
If you’ve previously missed payments, lenders may reject your application in fear that you’ll miss payments to them too. This is why it’s a good idea to sign up to a credit checking service yourself, so you can see what lenders see.